Small-scale LNG project in Canada faces delay over equipment import tax

Wed Oct 14, 2015 7:27pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

By Julie Gordon

VANCOUVER Oct 14 (Reuters) - A small-scale liquefied natural gas project on British Columbia's Pacific coast is facing a potential delay as the consortium behind the project appeals a tax imposed by Canadian customs on the import of its floating terminal.

The Douglas Channel project, which was expected to go to final investment decision (FID) before year-end, is facing a 25 percent tariff on the C$300 million ($232 million) floating terminal, which will be built in China and shipped to Canada.

"This is quite a significant price impact," John Lowe, executive vice president of project partner Altagas, told reporters on Wednesday, noting the overall budget for the development is roughly C$600 million. "We need to resolve this to reach FID."

The consortium, which includes Altagas, Japan's Idemitsu , France's EDF Trading and Belgium's Exmar, challenged the tax earlier this year, but lost. It filed its appeal in September and expects to have an answer next month. If the appeal fails, Lowe said it will seek further relief from the Canadian government.

The tariff exists "to protect Canadian industry, but there are no ship builders in Canada that build this kind of thing," said Lowe. "So it's a barrier for no useful purpose." ($1 = 1.2923 Canadian dollars) (Reporting by Julie Gordon; Editing by Bernard Orr)